Anger over big banks’ announced plan to charge for debit card use combined with the energy behind the Occupy Movement fueled the successful Move Your Money campaign that culminated on November 5th with Bank Transfer Day. The campaign resulted in approximately 700,000 new members depositing $4.5b into credit unions across the country since September. It’s been estimated that this brings the total assets held by US credit unions to surpass $1 trillion. While credit unions may have been a passive participant in the battle between an enraged public and big Wall Street banks, with this new influx of financial capital and a membership base exceeding 91 million they are now in a powerful position to strategically support the new progressive movement for a more sustainable economy.
The opportunity now exists to better articulate the connection between credit unions as cooperative businesses owned by the members and the need for them to invest more heavily in the growing cooperative business sector. Worker-owned businesses are not only an economically viable solution, but also a necessary one for addressing the massive wealth disparity present in our economy. They help build local wealth by retaining more of their profits within a community. Coops also place a high value on social capital by creating stable, living wage jobs and establishing workplaces that value the contributions of all workers. This business model will be gaining much more international attention over the next year, thanks to the UN’s 2012 International Year of Cooperatives campaign that highlights the positive economic contributions of cooperatives.
The Global Launch of the International Year of Cooperatives was mandated by the United Nations General Assembly in its resolution 65/184. The International Year of Cooperatives is intended to raise public awareness of the invaluable contributions of cooperative enterprises to poverty reduction, employment generation and social integration. The Year will also highlight the strengths of the cooperative business model as an alternative means of doing business and furthering socioeconomic development.
While employee-owned companies have generally outperformed their conventional competitors, there have been a number of highly publicized failures of majority employee-owned firms. Hyatt Clark, Rath Packing, Seymour Specialty Wire, and the plywood cooperatives in the Pacific Northwest quickly come to mind.
Employee ownership failed to survive in some Ohio ESOPs as well. Commercial Lovelace, a Columbus-based 51% employee-owned trucking firm went out of business in the aftermath of deregulation. Republic Hose, an industrial hose producer in Youngstown that was 100% owned by management and employees through conventional stock ownership, was sold but shut down by the buyer (the American subsidiary of Sweden's Trelleborg Rubber). North Coast Brass, a 100% ESOP brass and copper rolling mill in Cleveland, shut its doors in 1990 after two years of employee ownership, but was reopened under conventional ownership by a Korean firm. Mansfield Ferrous Castings, a 100% ESOP foundry, was sold during troubled times by the employees but continued to operate as a conventionally organized firm after the purchase. A similar transaction permitted the financially troubled Ironton Iron to continue operating, and the employees even retained some ownership rights.
Thus in three of these five Ohio cases, employee ownership saved jobs that otherwise would have been lost. In addition, in Ironton, hundreds of new jobs were created. In these situations, employee ownership proved to be a transitional phase between conventional owners. But the fact remains that employee ownership as an alternative was ultimately unsuccessful in all of these companies.
"Beyond the Bottom Line" A 30 minute documentary about a little known twist on the American Dream – businesses in which workers own the stock, reap the profits and decide for themselves how the company runs.
"Democracy in the Workplace" In this half hour video, the worker-owners of three Bay Area businesses show what it's like to work collectively and deal with problems in a truly democratic way. These businesses are managed solely by their employees.
November 15th: Cooperativism after Crisis
*Screening at Arizmendi Bakery: 1268 Valencia Street, San Francisco
"The Take" A documentary film by Avi Lewis and Naomi Klein about how workers in Argentina are taking over the factories abandoned by their owners after their country is devastated by economic crisis.
December (DATE TBA): Cooperativism Gone Big
"The Mondragon Experiment" A BBC Docmentary from the 1980s about the origins and growth of the Basque cooperative corporation, including a short history of the Rochdale cooperatives that inspired the Don José María Arizmendiarrieta.
The Valley Co-operative Business Association was recently established by a group of food co-ops, worker co-ops and a credit union to make our co-ops more visible, to advance our region’s co-operative economy and to make the benefits of co-operation more available in our community. Our valley is already home to a vibrant community of co-operative enterprises, many being a part of our effort to build a thriving co-operative economy in our region.
Founders and Founding Principles – Equal Exchange was started by Jonathan Rosenthal, Michael Rozyne and me. The three of us were all working at a food coop warehouse from the early 80′s before Equal’s founding in 1986. Working together in that environment that functioned in the food system but was active in trying to change the food system fed our souls and gave us vital experience. We got to buy and sell produce, cheese, and grains. Because that warehouse was doing cutting edge work buying from farmers coops we learned how to trade like this. And we made all kinds of mistakes. Over ordering. Under ordering. Buying from farms that were too big for us, or from farms that were too small, or were poorly organized.
We were direct marketing local products, often produce, to all kinds of consumers who were organized in pre-order/self organized clubs and cooperative storefronts We got to learn about marketing, customer service, co-op democracy,and building a movement while moving a product. Those lessons were grafted into the core operating DNA of Equal Exchange.
Co-directors, Rob Everts & Rink Dickinson
The first strand of the DNA was to take risk and learn. And we knew to do that meant to experience ongoing failure. Everything about Equal Exchange was a risk by definition. Our starting product – Cafe Nica Nicaraguan coffee was from an embargoed country. Our entire concept was to sell fair trade coffee and food which in 1986 meant we were marketing a concept that simply didn’t exist. But beyond that we didn’t know how to raise money, how to incorporate, how to create financial statements or really how to launch Equal Exchange. But we did know how to support and challenge each other. We shared this work with each other and opened the door for others but tried to keep a high bar. We believed new members needed to be given authority to make decisions but only if that was earned through responsibly admitting failure, sharing failure, and hence creating genuine learning. In a very real way that learning was the product we were trying to create. That learning was also critical to try to hold together the other two key somewhat contradictory strands of core operating DNA.
The second strand of the DNA was democracy. The co-op warehouse we worked at before Equal Exchange was collectively run by consensus by employees who were not owners of the co-op and had no governance control of the co-op. Instead, ownership (which was weak) and control were, in theory, held by consumers in the buying clubs and stores to whom we sold. Jonathan, Michael and I loved the democracy experimentation, at times loved consensus, and strongly objected to the employees being absent in ownership, governance and control. Instead of running from democracy and creating a private company, we ran towards democracy and created a worker co-op dedicated to the goal of supporting small farmers. It was a pretty crazy dream and I feel fortunate every day to get to do this work. It is not easy trying to even understand how to build a market-based organization that is democratic. We fail on a regular basis as we walk down this path. But we stay on that path.
The third strand of the DNA was strong management. We believed that the only way we had a chance to succeed was to hustle, make decisions, screw up, and get back up and do it again. To do this, meant that management needed to be empowered and backed up. The seeming contradiction is to build democracy while building strong management. Holding these things together are people and the need for an outstanding hiring process and the need for a high degree of trust. That trust is still there at Equal Exchange today but not as a static easy guaranteed trust. It is earned and lost and re-earned everyday as we all go through the stresses and strains of supporting small farmers, increasing sales, taking care of customers, and wearing the multiple hats of owners, workers, and perhaps managers or board members as well.
Founded 25 years ago, CHCA is 100% owned by its workers who are also members of the Service Employees International Union. The cooperative has set new quality standards for home health care in the New York region while improving wages and working conditions for the women who typically provide these services. The coop’s clients are almost always low income people who qualify for Medicaid. And since Medicaid reimbursement rates are very low, so is the pay for home care aides. So CHCA lobbies for higher Medicaid pay scales.
"On September 15th, NYC NoWC received a call from the Policy Division of City Council Speaker Christine Quinn. They wanted to know how City Council might help worker cooperatives in New York City! We acted immediately, engaging in continuous telephone and email dialogue, submitting proposals, providing research assistance, and arranging two in-person meetings at City Council offices. After one month of discussion, City Council decided to act on two proposals:
City Council will provide Center for Family Life in Sunset Park (a member of NYC NoWC) with a $150,000 grant to incubate 2-3 new worker cooperatives and
City Council will facilitate a working relationship between NYC NoWC and NYC Small Business Services.
On October 18th, Council Speaker Christine Quinn made a speech announcing a series of new job growth initiatives. Included in the speech was a mention of the $150,000 grant to Center for Family Life in Sunset Park (CFLSP).Since then, CFLSP has received additional press coverage, and expects a press event next week at CFLSP offices with Christine Quinn.
NYC NoWC is extremely excited to be working with City Council, and tremendously grateful for its generosity. And we look forward to continued collaboration with City Council on the issue of worker cooperative job creation."
"Democratic capitalism combines the free-market energies of competition and private property with the enormous productivity and innovation released in an environment of trust and cooperation. Consider the following facts:
Democratic capitalism is the synergy of democracy and capitalism.
Democratic capitalism improves the performance of companies, governments, and the world.
Worker ownership encourages individual development and mutual harmony.
Ultra-capitalism leads down the wrong road to more folly and violence.
Late in the 20th century, the world was moving towards these benefits of economic freedom when America led instead to ultra-capitalism, with a record concentration of wealth, another boom/bust cycle, slower world economic growth, and reversal of economic momentum in emerging economies. America then used its military might early in the 21st century to combat the violence that resulted from this failure of economic leadership.
The persistent human failure to employ reason in orderto associate in trust and cooperation at the global level has resulted in a terrible performance: continued misery for many and violence or fear of violence for all.Carey explains why this condition is unnecessary and how citizens can eliminate material scarcity, elevate spirits, unify people, and stop the violence by moving company practice and public governancetodemocratic capitalism."
Immanuel Ness is professor of political science at Brooklyn College, City University of New York, and a founding member of the Lower East Side Community Labor Organization, an autonomous activist organization in New York City. His research and writing focuses on social and revolutionary movements, labor militancy, and migrant worker resistance to oppression. Ness has just completed Guest Workers, Corporate Despotism and Resistance,(forthcoming University of Illinois Press) a book that examines the rise of guest workers from the global South in the US and labor opposition to employer abuses. He is author of numerous books including an anthology of contemporary labor: Real World Labor, with Amy Offner and Chris Sturr (Dollars & Sense). He edits the peer-review quarterly journal, Working USA: The Journal of Labor and Society, and has also edited several reference works, including the International Encyclopedia of Revolution and Protest: 1500 to the Present (Wiley-Blackwell 2009), and, with Aaron Brenner and Bejamin Day, the Encyclopedia of Strikes in American History (Sharpe 2009).
Dario Azzellini is a writer, documentary director and political scientist and lecturer at Johannes Kepler University in Linz, Austria. He splits his time between Berlin and Caracas. His research and writing focuses on social and revolutionary militancy, migration and racism, people’s power and selfadministration, and workers control, with extensive case studies in Latin America. He served as Associate Editor for the The International Encyclopedia of Revolution and Protest: 1500 to the Present, and was primary editor for Latin America, the Spanish Caribbean, and the new left in Italy. He serves as Associate Editor for WorkingUSA: The Journal of Labor and Society and for Cuadernos de Marte, an academic publication about war sociology released by the University of Buenos Aires. He has published several books, among them The Business of War (Assoziation A 2002), about the privatization of military services. His latest documentary Comuna under construction (2010) examines worker councils in Venezuela.
Linda Hogan and Terry Daniels of hOur World talk about Time Banks in a presentation for PODER in San Francisco October 11, 2011. Time Banks are a way to get and receive services without total dependence on cash. Their roots reach deep into our history and saved many during the Depression of the 1930's. Time Banks are making a giant comeback- and this time may be here for good!
That is why I am co-sponsoring – along with Republican Congresswoman Jo Ann Emerson of Missouri – a Capitol Hill briefing on “The Role of Cooperatives in Rural and Urban Communities.” The briefing, aimed at Members and their staff, will showcase practitioners, advocates and academics describing the challenges that coops are facing. It will describe why federal policy support – which I have pledged to develop -- is needed for these unique entities.
The policy makers and stakeholders who will be filling a Rayburn House Office Building hearing room Tuesday afternoon will hear a lot about Mt. Airy’s pride, the Weavers Way Coop. Bob Noble of Weavers Way will make a presentation along with speakers from the National Rural Electric Cooperative Association, Cleveland Ohio’s Evergreen Cooperative Initiative, the National Credit Union Association and others from city, town and farm. Credit Unions – a major banking alternative in Philadelphia – are, by the way, the nation’s largest co-op sector.
Health coperatives are a growing segment of the movement . On Friday March 25, in New York City, I visited the Cooperative Home Care Associates (CHCA) -- a nationally recognized, South Bronx-based owner home care agency. CHCA now anchors a national cooperative network generating over $60 million annually in revenue and creating quality jobs for over 1,600 individuals.
Such economic impact is the norm. Coops are unique, but they aren’t small. Overall, U.S. cooperatives account for more than $3 trillion in assets, over $500 billion in revenue, $25 billion in wages and benefits – and nearly one million jobs.
Cooperatives are good neighbors. Often cooperatives provide funds for community fairs, health centers, fund drives, and the like. As a result of working together in cooperatives, members better understand how to unite in solving community problems. And leaders developed in cooperatives – as we have seen at Weavers Way -- also become leaders in other community organizations.
As Co-Chairman of the Congressional Urban Caucus, I have set the cooperative movement high on my agenda for the 112th Congress. I have met with national co-op leaders, and my staff is developing approaches that support their legislative goals. Whatever else may be the temper of the current Congress, the cooperative movement offers great prospects – to use the proper word - for bipartisan “cooperation.”
Who We Are, What We Believe, and the World We Want to Build
Worker co-operatives are enterprises that are owned and controlled by their workers. Their purpose is to provide their member-owners with a work environment which facilitates their professional and human development, and provides the best wages and benefits possible within the capacity of their businesses. Worker co-ops are run democratically on the principle of one member - one vote.
Worker co-operatives around the world embrace and accept the seven Co-operative Principles recognized by the International Co-operative Alliance and the Co-operative Values: self-help, democracy, equality, and solidarity. In the tradition of their founders, co-operative members embrace the ethical values of honesty, openness, social responsibility and caring for others.
Together, members of worker co-operatives work for the establishment of a new mode of socio-economic development with a human face, in which economic, social and cultural needs of human beings will always have priority over the requirements of capital. We envision a co-operative economy whose goal is to serve the needs of the people who build it rather than the capital that finances it. Together, members work for the establishment of a new mode of sustainable socio-economic development that is just for all, and compatible with the ecological sustainability of our planet.
Our co-operative federations have the mission to help worker co-operatives build a new world with a just and caring human face. The five worker co-op federations in North America signing this Declaration pledge to do everything possible, in accordance with our values, to accomplish this mission,
by facilitating the creation of new worker co-operatives,
by facilitating the harmonious development of our co-operative members,
by partnering with all organizations sharing this vision and the will to act for the emergence of this new mode of equitable, sustainable socio-economic development, and
by urging governments to use the worker co-operative model to contribute to this better future.
The Six Components of Coherent and Effective Public Policy to Encourage the Creation and Development of Worker Co-operatives
In order to urge governments to help create this better future, we call for coherent and effective public policy favouring the creation and development of this new model of socio-economic development, with the following six components.
1. Recognition: Recognize the relevance of and provide for the eligibility of worker co-operatives in government programs and policies in all ministries and government agencies.
2. Development: Facilitate the creation and development of worker co-operatives by working in partnership with their federations, notably by helping them to fulfill their mission of promoting worker co-operation, education for economic democracy and technical assistance in the creation and development of worker co-operatives.
3. Capitalization: Facilitate the capitalization and financing of worker co-operatives by the establishment of dedicated co-operative development funds in partnership with the co-operative movement, as well as by favourable tax policies.
4. Legislation: Adopt a specific law governing the operation of worker co-operatives, or specific provisions on worker co-operatives in the case of a broader law on co-operatives.
5. Conversions: Propose the co-operative solution as an alternative to the risk of the imminent closure of thousands of companies following the retirement of their owners from the baby boomer generation and the lack of potential buyers expected; set up programs to help the succession of these companies to their employees through one or other of the various legal forms of co-operatives controlled by their employees.
6. Government Procurement: Strengthen the network of worker co-operatives by giving priority in purchasing their goods and services.
CICOPA is the international organization of worker co-operatives, affiliated with the International Co-operative Alliance. CICOPA-Americas is its regional organization in the Americas, and CICOPA-North America, covering worker co-ops in Quebec, the rest of Canada and the United States, is the sub-regional entity.
"The Eastern Conference for Workplace Democracy (ECWD) held its biannual conference in Baltimore, Maryland from 8-10 July, focusing on the effort to expand and consolidate a national network of worker cooperatives. The meeting was attended by more than 200 participants who were committed to expanding the conference for workers democracy in the US and Canada. At a time when organized labor in the US is at its unprecedented nadir, a central theme emerged from the conference: As traditional trade unions are declining it is vital to build new forms of worker organization rooted in the concept of democracy and equality.
The ECWD brought together leading activists and participants from the North American cooperative movement to discuss the state of cooperatives, new initiatives, and potential obstacles to forging worker democracy and economic control in the region. The conference brought together a diverse group of cooperatives engaged in new organizing efforts.
The original goal of the conference was to share experiences and knowledge on new developments facing cooperatives in the US and Canada, expand opportunities to marginalized communities, and developing an agenda to maintain and develop the cooperative movement in the US through working-class solidarity.
Richmond, CA is actively encouraging worker cooperatives as a solution to unemployment. Worker, consumer, producer & housing cooperatives have long existed in the region, and Terry Baird is a veteran of that movement. He also presents the International Cooperative Principles for that section of the upcoming, "This Way Out: A Guide to Starting A Worker Cooperative" DVD coming out soon.
The goal of this workshop is to share skills and potentially establish cooperative producing systems within the Occupy Oakland movement to empower participants and increase the collective economic power of the movement. Be prepared to share your skills (eg sewing, crocheting, knitting, shoe repair, electronic repair, programming, roofing, construction, anything you can do that is of value to someone else, etc).
But work is by no means guaranteed. Before the Sabbath or Jewish holidays, the demand for cleaners increases; on other days, many women never leave the corner.So some of them decided they would take matters into their own hands and start a business.“If they pick you up for two or three hours, that’s good,” said Ms. Bucio, who moved to the United States from Michoacán, Mexico, with her sister in 1997. “And if not, in any case, you go like you arrived, with empty hands.”
Last November, the Bucio sisters founded the Apple Eco-Friendly Cleaning cooperative with a handful of women whom they met at the Williamsburg hiring site. The group advertises on recycled paper and makes its own cleaning products, forgoing harsh chemicals for ingredients like lemon juice, glycerin, borax and fruit oils. The women taught themselves to make the cleansers and refined their recipes through a combination of Internet research and trial and error. “When we say we’re from a company with a business card, they treat you differently from the time you arrive,” Yesenia Bucio, 32, Teresa Bucio’s sister, said. “I feel very good, very happy and I have very high self-esteem.”"
The first conference develops as a cooperative reaction to the estimate that, in Canada alone, 200,000 small business owners will be retiring over the next 10 years. For many, they will not have children interested in running the business. Further, the buyers may be more interested in simply shutting the companies down instead of maintaining them. Worker cooperatives offer a great opportunity for the owners to sell to their employees. This allows the legacy of the owner to carry on into perpetuity. They will not see their life’s work simply boxed up and shipped away. For the children who inherited a company that they don’t really want, it gives them an opportunity to realize their inheritance without harming the workers who helped provide that inheritance. For communities, it means being able to keep legacy businesses, stores and factories that helped define the local culture as well as jobs and capital.
In the United States, owners avoid Capital Gains taxes if they sell to their workers. I am not sure if Canada has similar laws, but my guess is that this conference will answer that question and more. The conference begins October 11 and runs through the 13th.
Of course, my good friend, USFWC President and Progressive Magazine blogger Rebecca Kemble will also be present and presenting. It should be an exciting conference and a rare opportunity for those of us in the US to learn about the Quebecois worker coop movement. Likewise, we will also be sharing some of our newest developments such as Union Cab’s new peer review program which moved disciplinary and accountability power from management to panels of peers. My fellow worker, Martha Kemble, will be presenting that topic.
However, the big event will be the creation of a CICOPA North America as a subgroup of the CICOPA Americas. Traditionally, the two continents of this hemisphere have been linked together in one geographical unit (the others of Europe, Africa and Asia). To be fair, the number of worker co-ops in the US was nominal until just a few years ago. However, the development of the regional trading groups, MERCOSUR and NAFTA, have caused the ICA map to become a bit dated. The work here, won’t undo that map, but it will create an organization that is better suited for working with the NAFTA based nations (including Mexico and the Caribbean) as our movements grow and prosper.
Worker Cooperative Startups Worker cooperatives are worker owned, democratically managed businesses. Worker ownership means that members appropriate any profit or loss the coop incurs. Outside investors are limited to a fixed rate of return. Democratic management means one member, one vote in the governance of the cooperative, giving the workers control. The standard worker cooperative model has internal capital accounts comprised of member investments, a collective reserve account of unallocated retained earnings, debt, and preferred equity (non-voting, non-convertible, fixed value, fixed return shares). This paper focuses on the special case of a worker cooperative startup. Startup worker cooperatives are expected to have an initial operating loss. After the startup period worker cooperatives are generally expected to be profitable, barring unforeseen circumstances. Worker cooperatives create a unique investment situation where initial members are required to make an investment that is expected to decline in value, something unprecedented in mainstream finance.